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Abstract
Recent environmental assessments have highlighted the extent of land degradation in
Australia and the significant costs involved in addressing it. With projected investment costs
running into tens of billions of dollars, it is not surprising that greater attention is now being
focussed on who should pay. One idea gathering significant momentum has been the
imposition of an environmental levy. Such a levy would raise public funds to be spent on
resource degradation issues and has been proposed to work through the taxation system in a
similar fashion to the Medicare levy, albeit for a more limited 10 year period.
The paper assesses the arguments behind the imposition of an environmental levy and
considers some of the issues associated with its effective implementation. Particular
challenges in the establishment of environmental priorities, public and private attributes of
environmental problems and the institutional arrangements for levy collection and
management are identified and discussed.